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Ask Dave

Holding Out For Freelance Work

Hear Norm Rollins, Dave's guest and tax attorney, tell Jeff how much tax to hold out for his freelance work.

QUESTION: Jeff has a full-time job but also does freelancing on the side. He wonders how much you should hold out for freelance work as far as taxes go.

ANSWER: You’ll be subject to federal income tax and Medicare; so-called self-employed tax on everything over $600 net. That’s 15.3%, and then there’s an average of about 20% tax. So I’d look at about 35% of my net, which is whatever I earn in freelance, less my expenses. That is on the high side, but I’d rather have a little more set back. Set up a separate checking account for your freelance income and expenses.

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Taxes Made Easy! 

Taxes Made Easy

Take the stress out of tax prep with our free checklist.

Taxes Made Easy! 

Take the stress out of tax prep with our free checklist.